Understanding the $8000 / $6500 Tax Credit

Understanding the $8000 / $6500 Tax Credit

Credits Offered to both First Time Home Buyers and on Purchase of a New Primary Residence

There are key dates and conditions involved in this process if you expect to qualify for the $8000 or $6500 tax credit.

Some of the basics are:

· Homes valued at $800,000 or more do not qualify.

· A first-time buyer does not mean a person who has never purchased a home.  The IRS defines a first-time buyer as anyone who has not owned a principal residence during the three-year period prior to the purchase.

· If you’re married, you and your spouse must pass the consecutive-year test. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse would qualify for the $8000 first-time homebuyer tax credit. However, you could be eligible for the repeat buyers’ $6,500 credit.

· Unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as if a parent jointly purchases a home with a son or daughter.

Key Dates:

· April 30, 2010: Purchase and sales agreements must be dated by all parties with a date on or before Friday, April 30, 2010.

· June 30, 2010: Purchases must close on or before Wednesday, June 30, 2010.

Here is the tax credit form:

First Time Homebuyer TAX CREDIT FORM